11 Oct 2012

Home sales fuel modest US economy expansion

2:01 pm on 11 October 2012

A closely-watched survey is suggesting the US economy expanded modestly in the past six weeks thanks to a stronger housing market.

The US Federal Reserve's Beige Book, which is an anecdotal report on economic conditions, found a widespread improvement in the housing market helped to mask largely flat consumer spending.

Existing home sales strengthened in all 12 districts surveyed, while new home construction and sales mostly improved, the central bank said.

Consumer spending, which accounts for about 70% of US economic output, was "flat to up slightly".

The book says hiring conditions remained little changed from August, the BBC reports.

The Beige Book canvasses opinion from firms across the US eight times a year and its report is used by the Fed to help set interest rates.